Question: 5. KEY QUESTION You are choosing between two goods, X and Y, and your marginal utility from each is as shown below. If your income

5. KEY QUESTION You are choosing between two goods, X and Y, and your marginal utility from each is as shown below. If your income is $9 and the prices of X and Y are $2 and $1, respectively, what quantities of each will you purchase to maximize utility?

What total utility will you realize? Assume that, other things remaining unchanged, the price of X falls to $1. What quantities of X and Y will you now purchase? Using the two prices and quantities for X, derive a demand schedule (price–quantity demanded table) for X.

Units of X MUx Units of Y MUy 1 10 1 8 2 82 7 3 63 6 4 44 5 5 35 4 6 26 3

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